The Finance 202: Gas tax divides Republicans

Thursday , February 15, 2018 - 6:25 AM

Tory Newmyer

(c) 2018, The Washington Post.

WASHINGTON - If confusion can rebuild moldering roads and bridges, we’re all in luck. President Donald Trump injected a trademark heaping of it into the debate over a major infrastructure package on Wednesday when he told lawmakers he’d back a gas tax to pay for it.

The curveball came two days after the administration rolled out a long-awaited public works proposal that called for $200 billion in federal spending without specifying a source. It aims to unleash $1.5 trillion for the projects but hands most of that to state and local governments and private investment sources.

The budget submitted Monday called for cutting $178 billion in transportation programs over the next decade. “Mr. Trump’s budget, if enacted, would slash existing infrastructure programs, potentially imperiling major projects whose sponsors intended to tap them for construction funds in the coming months,” The Wall Street Journal’s Tedd Mann wrote. “For instance, the administration proposes to save more than $1.4 billion by eliminating the Federal Transit Administration’s New Starts program, though it would permit projects that already have signed agreements to be funded through those grants to proceed.”

Then again, the administration’s spending blueprint was overtaken before its debut by the sweeping spending deal Trump signed last week. And that law calls for $10 billion in new infrastructure funding over each of the next two years - half the level the infrastructure plan itself proposes.

The 25-cent increase in the gas tax Trump endorsed Wednesday would raise $394 billion, according to an estimate from U.S. Chamber of Commerce, which also backs the idea.But it divides Republican lawmakers and party allies alike. House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., for example, wants it considered. Senate Environment and Public Works Committee Chairman Sen. John Barrasso, R-Wyo., on the other hand, calls it a nonstarter. Ditto Senate Majority Leader Mitch McConnell, R-Ky., according to Sen. Chuck Grassley, R-Iowa, and Sen. John Cornyn R-Texas, the No. 2 Republican in the Senate.

Among the outside forces shaping the debate, the American Trucking Associations is lining up with the chamber, and oil interests are divided. But the Koch network - a leading mover last year in defeating the border adjustment tax that House Republicans favored to generate some $1.5 trillion for the tax code overhaul - is mobilizing against the idea.

“Increasing the gas tax is the wrong approach to addressing our nation’s infrastructure needs,” Americans for Prosperity chief government affairs officer Brent Gardner said in a statement Wednesday. “The American people are just beginning to feel the benefits of the recently passed tax cuts bill. Instead of undermining the relief taxpayers just received, the president and Congress should focus on smarter spending and breaking through the regulatory gridlock that delays projects and drives up costs.”

So the path forward is as clear as a cloverleaf exchange, at rush hour, during an earthquake.